Question

data for gomez, inc. and fox corp follow
requirement 1. prepare common - size income statements. (round your answers to one decimal place, x.x%.)
gomez, inc. versus fox corp
common - size income statement (partial)
year ended december 31
\t\t\tgomez, inc. %\tfox corp. %
net sales revenue\t\t%\t\t%
cost of goods sold\t\t%\t\t%
other expenses\t\t%\t\t%
net income\t\t%\t\t%

data
\t\t\tgomez, inc.\tfox corp.
net sales revenue\t$ 16,000\t$ 24,000
cost of goods sold\t9,632\t17,016
other expenses\t5,408\t5,160
net income\t$ 960\t$ 1,224

Explanation:

To prepare common - size income statements, we calculate each item as a percentage of net sales revenue. The formula for each item's percentage is $\text{Percentage}=\frac{\text{Item Amount}}{\text{Net Sales Revenue}}\times100$.

Step 1: Calculate for Gomez, Inc. - Net Sales Revenue

The net sales revenue for Gomez, Inc. is the base, so its percentage is always 100.0%.

Step 2: Calculate for Gomez, Inc. - Cost of Goods Sold

The cost of goods sold for Gomez, Inc. is $9,632$ and net sales revenue is $16,000$.
The percentage is $\frac{9632}{16000}\times 100 = 60.2\%$

Step 3: Calculate for Gomez, Inc. - Other Expenses

The other expenses for Gomez, Inc. is $5,408$ and net sales revenue is $16,000$.
The percentage is $\frac{5408}{16000}\times 100=33.8\%$

Step 4: Calculate for Gomez, Inc. - Net Income

The net income for Gomez, Inc. is $960$ and net sales revenue is $16,000$.
The percentage is $\frac{960}{16000}\times 100 = 6.0\%$

Step 5: Calculate for Fox Corp. - Net Sales Revenue

The net sales revenue for Fox Corp. is the base, so its percentage is always 100.0%.

Step 6: Calculate for Fox Corp. - Cost of Goods Sold

The cost of goods sold for Fox Corp. is $17,016$ and net sales revenue is $24,000$.
The percentage is $\frac{17016}{24000}\times 100 = 70.9\%$

Step 7: Calculate for Fox Corp. - Other Expenses

The other expenses for Fox Corp. is $5,100$ and net sales revenue is $24,000$.
The percentage is $\frac{5100}{24000}\times 100 = 21.3\%$

Step 8: Calculate for Fox Corp. - Net Income

The net income for Fox Corp. is $1,224$ and net sales revenue is $24,000$.
The percentage is $\frac{1224}{24000}\times 100=5.1\%$

Answer:

Item	Gomez, Inc. %	Fox Corp %
Cost of Goods Sold	60.2%	70.9%
Other Expenses	33.8%	21.3%
Net Income	6.0%	5.1%